Adjustments in the proposal include enriching delisting criteria, simplifying delisting procedures and creating a risk warning board and a board for equity sales before delisting to protect investors.

The Hang Seng Index shed 0.2 percent, while the China Enterprises Index of the top mainland listings in Hong Kong rose 0.2 percent as bourse turnover neared a 2-1/2-month low.— Chinese markets shut for a three-day public holidayMainland Chinese markets are shut for a three-day public holiday and will reopen on Thursday, while markets in Hong Kong will be closed on Wednesday and Friday.

The $668 million sale was made via a block trade to unnamed institutional investors, the New York-based bank said in a statement Monday.

Citigroup and the state-owned Shanghai plan a new “strategic arrangement” for their cooperation that will involve using Citi’s worldwide networks and credit lines to support SPDB’s global expansion, it said.

Last month, Citi’s Chinese subsidiary received regulatory approval to become the first U.S.-based bank to issue its own credit cards in China. The business will include both consumer and commercial cards, and is expected to launch before the end of the year.

Until now Citi was restricted to issuing cards through a joint venture with SPDB. That business will be taken over by the Chinese bank.

China’s growing middle class is a prime target for lenders, and the market is gradually opening after years of lobbying by foreign governments and financial institutions for a loosening of restrictions.

Citi also recently got approval to set up a joint-venture securities firm in China with Orient Securities Company Ltd. The venture, Citi Orient Securities Co Ltd., will be based in Shanghai, and will focus on investment banking in the Chinese domestic market.

In Hong Kong, investors were also spooked by fears that more companies could take advantage of this year’s rally to raise funds, putting further pressure on stock prices.The Hang Seng Index ended down 1.4 percent while the China Enterprises Index of the top Chinese listings in Hong Kong slipped 2.3 percent.

The Shanghai Composite Index was down 0.6 percent in the highest turnover in four sessions.

American International Group (AIG) announced a $6 billion stake sale in its Asia subsidiary, AIA Group Ltd at a 6-7 percent discount, sparking fears that any other placements could be priced at a bigger discount than AIA, Asia’s third-largest insurer and seen as a better quality name.”It is precisely because of the possibility of deleveraging by foreign financial institutions that we prefer not to set an aggressive target level for the Hang Seng Index this year,” said Alan Lam, Julius Baer’s Greater China equity analyst.

“Major shareholders could be looking to offload holdings from last year’s IPOs when their lockup periods expire, but prospective large-scale IPO activities from China may absorb market liquidity in a big extent,” he added.While trading was suspended in AIA shares on Monday, its Chinese peers were particularly hard hit.

China Life Insurance and Ping An Insurance lost 4.4 percent and 3 percent, respectively.

Adding to weakness in Chinese financial stocks were banks, the biggest drags on benchmark indices.

China’s biggest lender, Industrial and Commercial Bank of China (ICBC) lost 1.1 percent in Shanghai and 2.7 percent in Hong Kong.Speaking at the annual session of China’s National People’s Congress (NPC), Premier Wen Jiabao cut the country’s 2012 growth target to 7.5 percent from the longstanding 8 percent annual goal as Beijing looks to wean the economy off reliance on external demand and foreign capital.

“Investors are taking profits after no big surprises for the NPC’s work report.

The slower GDP growth target may imply less or later than expected policy easing in China,” Julius Baer’s Lam said.Hong Kong shares also weakened after the Hong Kong dollar dropped to its weakest levels since end-January, pointing to some possible outflows out of the territory.

Growth-sensitive Chinese resources stocks saw the bigger percentage losses in Hong Kong.

Jiangxi Copper and Angang Steel each lost about 4 percent, while Yanzhou Coal slipped 3.3 percent.

Sun-Art Retail Group Ltd, among the largest hypermart operators in China, slumped 6.7 percent in more than three times its 30-day average volume after posting a sharp slowdown in same-store sales for the second half of 2011.

The Shenzhen Component Index was up 1.31 points percent or 0.01 percent to close at 9,616.65 points today on transaction value of 78.12 billion yuan.

Both indices opened sharply higher today following the 0.5 percentage point cut in the required reserve ratio. Trading was volatile in the morning. The markets began to fall during the afternoon session.

Top Headlines:

Commercial banks posted a 36.3 percent year-on-year increase in fourth quarter 2011 net profit to 1.04 trillion yuan, of which non-interest income accounted for 19.3 percent. This means that banks earn 2.85 billion yuan on average per day.

Through the end of the fourth quarter, commercial banks had total outstanding non-performing loans of 427.9 billion yuan, up 20.1 billion yuan from the previous quarter. The non-performing loan ratio was one percent.

Last week, stock mutual funds reduced their holdings by 1.77 percent week-on-week to 79.46 percent following a lack of market  momentum.

CICC predicts new loan growth in February mat hit two trillion yuan. It anticipates two to three more reserve ratio cuts during the first half of 2011.

According to CICC, CPI growth may slow to 3.5 percent in February.

According to Wind, a total of 52 listed companies had announced plans to raise funds through the end of last week, with plans to raise as much as 106.47 billion yuan, compared with plans by 13 companies to raise 48.17 billion yuan a year ago.

Equity Movers:

Electronic product makers were the most bullish, with five shares up by their daily limits, including Sichuan Huiyuan Optical Communications (000586, 6.56, +10.067%), Shenzhen Dvision Video Communications (300167, 18.46, +10.012%) and Zhengzhou Brand new C.A.P Electronics (300248, 31.65, +10.010%).

The cement sector was the second-biggest sector today. Jilin Yatai Group (600881, 5.54, +4.924%), Xishui Strong Year Inner Mongolia (600291, 7.04, +3.988%) and Henan Tongli Cement (000885, 11.97, +2.308%) were up by more than two percent.

Financials traded mixed. China Pacific Insurance (601601, 21.01, +0.864%), Ping An Insurance (601318, 40.09, +0.855%) and New China Life Insurance (601336, 29.85, +0.573%) rose.

Agricultural Bank of China (601288, 2.72, +0.741%), Minsheng Banking Corp (600016, 6.47, +0.466%) and Bank of Communications (601328, 12.88, +0.390%) gained.

Following remarks by Guo Shuqing, the Chairman of CSRC, that he supported listing applications by catering firms, shares from companies in related industries surged. China Quanjude Group (002186, 30.79, +10.00%), Xian Catering (000721, 7.81, +3.99%) and Beijing Xiangeqing (002306, 17.51, +1.21%) outperformed.

The goals for the next four years range from the concrete, such as more than doubling trading volumes, to the aspirational aim of “significantly increasing the international influence” of Shanghai’s markets.

The government said on Monday these were intermediate steps towards the ultimate objective of making Shanghai an “international financial centre that is consistent with China’s economic strength” by 2020.

The city’s stock, bond and commodities markets are already among some of the world’s biggest. The Shanghai Stock Exchange was ranked sixth globally in terms of market capitalisation in 2010, just behind London.

But stringent capital controls have cut Shanghai off from other markets and foreign institutions are only allowed to invest small amounts in it. The latest plan promised only a gradual removal of these barriers.

Kevin Lai, an economist with Daiwa Capital Markets, said China’s legal and accounting systems also required substantial improvements. “You need a platform that is market-driven and rules-based, an environment in which contracts can be enforced to international standards,” he said.

The Shanghai city government and the National Development and Reform Commission, a powerful economic planning agency, outlined four areas of focus in the 25-page document published on Monday.

“We try to keep the lights and air conditioning switched off for as long as possible,” says Mr. Zhen, dressed in a thin white cotton shirt on a sweltering summer day. His agency occupies an office in downtown Shanghai that was once a magnet for millionaire speculators, and is now almost deserted.

Official figures released Thursday offer further evidence that the government’s efforts to squeeze China’s property bubble are having an impact. Prices of newly built homes in 39 of 70 large and medium-sized Chinese cities covered in a government survey rose in July from the previous month, down from 44 cities in June.

Prices in Shanghai, Beijing, Shenzhen, Guangzhou and some other cities were flat in July from June.

Flat prices in Shanghai reflect the fact that turnover in China’s most expensive property market has fallen sharply since the start of the year, particularly in the luxury segment.

Sales of newly built homes in China’s commercial capital in the first seven months of this year fell 5.8% to 8.58 million square meters in terms of floor space from the year-earlier period, while prices rose 2.6% over the same period, according to official data.

However, despite a government push this year for more-accurate home-price data from China’s National Bureau of Statistics, international markets—and most Chinese consumers—remain deeply dubious of the official monthly figures. Confidence in the official figures is so low that the markets pay more attention to numbers from a private data provider, the China Real Estate Index System.

According to data from the China Real Estate Index System, prices of new apartments in Shanghai have risen by more than 150% in the past five years. That outpaces a 107% increase in wages over the same period—moving home ownership further out of reach for average earners. But the official data tell a different story. According to China’s NBS, prices for new apartments in Shanghai have climbed 20% over the past five years—well below the increase in wages.

Transactions are mainly from first-time buyers or upgraders purchasing more modest homes. Rich businessmen from nearby Zhejiang province, famed for driving up Shanghai’s property market in the boom years, have largely pulled out.

Cracks started appearing in Shanghai’s property market after the government in October limited households to buying one additional home, on top of existing nationwide curbs on bank lending. Out-of-towners need to prove that they have paid social security taxes before they can purchase a home in the city, and if they are already homeowners, they aren’t permitted to purchase additional homes.

Shenzhen Gas, a liquefied gas distributor that listed a 900 million-yuan IPO in Shanghai on Friday, closed up 118 percent at 15.17 yuan from its IPO price of 6.95 yuan, easily beating an average analyst forecast of only 8.5 yuan and betraying clear signs of heavy speculation in new shares that has been common in China’s nascent stock market.

Shenzhen Gas is now valued at 101 times its 2008 earnings compared with an average historical price earnings ratio of 38 times for China’s power utility counters. Its forecast PE for 2009, based on analysts’ estimates, reached 80 times compared with a sector average of 33 times.

A second batch of eight companies debuting on China’s Nasdaq-style ChiNext market in Shenzhen on Friday jumped between 33 and 64 percent, with software maker Beijing Supermap Software Co 300036.SZ the biggest gainer with a jump to 32.20 yuan from its IPO price of 19.60 yuan.

Leading the losers on Friday was chemical raw materials maker Tanshan Sanyou Chemical Industries Co (600409.SS), which closed down 6.86 percent at 8.55 yuan after the company unexpectedly said late on Thursday that it had given up a previously announced plan to acquire control of a chemical fiber maker.